REG - Hydrogen Utopia Intl - Ohrid Organics - €450,000 Sale and Update

Hydrogen Utopia InternationalAnnouncement

09/12/2024 07:00

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RNS Number : 2544P  Hydrogen Utopia International PLC  09 December 2024

The information contained within this announcement is deemed by the
Company to constitute inside information stipulated under the Market
Abuse Regulation (EU) No. 596/2014 as it forms part of UK domestic law by
virtue of the European Union (Withdrawal) Act 2018.  Upon the
publication of this announcement via the Regulatory Information Service,
this inside information is now considered to be in the public
domain. 

 

 

 

 

9 December 2024

Hydrogen Utopia International PLC

 

 (the 'Company' or 'HUI')

 

Ohrid Organics - €450,000 Sale and Update

 

Hydrogen Utopia International PLC, a company specialising in converting
non-recyclable mixed waste plastic into hydrogen and other carbon-free fuels,
new materials or distributed renewable heat, is pleased to inform shareholders
that Ohrid Organics DOO ("Ohrid Organics DOO"), based in North Macedonia, has
completed the sale of €450,000 worth of THC medical cannabis. Payment will
be in advance of shipment. Ohrid Organics DOO is the subsidiary of Ohrid
Organics Limited ("Ohrid Organics"), the UK holding company.

 

As announced on 2 January 2024, HUI exercised its option to acquire 49 % of
Ohrid Organics, anticipating Ohrid Organics to generate substantial future
cashflows for its shareholders and which HUI would utilise in developing its
pipeline of waste plastic to hydrogen plants.  HUI understands that further
sales are expected to take place, particularly due to the following
developments:

 

 (i)   The board of Ohrid Organics DOO is negotiating with several potential offtake
       customers. Any such offtake agreements would be in addition to Ohrid Organics
       DOO's existing supply agreement with Canopy Growth Germany GmbH, a subsidiary
       of Canopy Growth Corporation, announced on 11 July 2024.

 (ii)  Given the current interest in the Ohrid Organics DOO facility and its
       products, the board of Orhid Organics has decided to pursue a targeted
       fundraising to accelerate the facility's capacity. HUI understands that there
       are ongoing discussions with several parties interested in providing funding
       to facilitate this expansion in 2025.  A 2 year £1 million convertible loan
       note with a coupon of 14% per annum payable yearly is currently envisaged.

 

Ohrid Organics DOO holds a license to operate the largest cultivation area in
North Macedonia, giving it the leverage needed to meet the rising demand for
medical cannabis in Europe and across the globe. Over the course of this year,
Ohrid Organics DOO has focused on expanding its facilities and has increased
its cultivation area by 50%. It now operates six greenhouses, each covering
500 square meters, for a total cultivation area of 3,000 square meters. Even
with this expansion, Ohrid Organics DOO's facility only utilises 17% of Ohrid
Organics DOO's licensed area. The licensed area has the potential to
accommodate up to 37 greenhouses, enabling production of up to 30 tonnes per
year across 20,000 square meters of cultivation area. Over the past six
months, Ohrid Organics DOO has trialled strains from certain selected
breeders, collecting data on the strains' performance in Ohrid Organics DOO's
environment and selecting those strains capable of delivering the targeted
effects.

 

The genetic strains selected and cultivated at the start of 2024 did not
perform as positively as expected. Ohrid Organics DOO underwent significant
changes within its management, bringing in top-tier performers fully committed
to the facility's success. These changes, while necessary, caused delays in
commercial production and impacted the overall target output for the year,
resulting in the postponement of the anticipated year-end turnover. HUI
understands from the board of Ohrid Organics that the challenges have been
identified and resolved. Additionally, the board of Ohrid Organics confirmed
that the three strains currently being cultivated on a commercial scale by
Ohrid Organics DOO are expected to deliver consistent quality and achieve the
desired effects. Ohrid Organics anticipates that the delay in turnover for
2024 will be partially offset in 2025.

 

Several structures for the acquisition of 49% of Ohrid Organics are being
considered, and HUI is exploring its options.

 

Aleksandra Binkowska, CEO of HUI, commented: "I am delighted  with the
€450,000 sale of  Ohrid Organics' medicinal cannabis, marking a step
forward for HUI in achieving its objectives. While I acknowledge that this
figure falls short of expectations, I am confident that we will make up for it
next year thanks to the outstanding new management team and the valuable
relationships recently established. The original agreement between HUI and
Ohrid Organics stipulated that HUI would not take part in managerial
decisions. However, circumstances necessitated our intervention and
significant changes were implemented, including the removal of underperforming
individuals from the management in order to safeguard shareholder value. These
individuals contributed to delays, but we are now back on track with a highly
capable team, fully focused on regaining lost ground and ensuring maximum
returns. With highly experienced professionals now leading the effort, Ohrid
Organics DOO successfully completed its first sale and secured a contract that
is expected to offset the losses incurred in 2024 and accelerate the Ohrid
Organics program. HUI and Ohrid Organics remain closely linked, with HUI's
primary objective being the funding and development of its first plastic
waste-to-hydrogen facility, which continues to be our primary focus."

For further information, please contact:

Hydrogen Utopia International PLC

Aleksandra Binkowska

+44 20 3811 8770

 

Alfred Henry Corporate Finance Limited (LSE Corporate Adviser)

Nick Michaels/Maya Klein
Wassink

+44 (0) 20 8064 4056

 
 
 

Novum Securities Limited (Broker)
 

Jon Belliss/Colin
Rowbury

+44 20 7399 9400

 

About Hydrogen Utopia International PLC

 

HUI aims to become one of the leading new European companies specialising in
turning non-recyclable mixed waste plastic into carbon-free fuels, new
materials or distributed renewable heat.

 

A HUI facility uses non-recyclable mixed waste plastic as feedstock and turns
it into syngas from which new products and energy can be produced. HUI
anticipates that its revenues will be derived from a variety of sources,
dependent upon location and configuration of the HUI facilities, including the
sale of syngas, hydrogen and other gases, electricity and heat sales, and the
payment to it of fees for a given quantity of non-recyclable mixed waste
plastic received at a HUI facility.

 

HUI will target areas where there is significant private sector interest or
potential, financial backing is accessible and or where substantial EU and/or
government funded sources of grants and loans are or may be available. The
global increase in fossil fuel-based energy prices reinforces the need for
alternative, price competitive energy sources, which HUI's business model can
provide.

 

The pressing need to deal with growing amounts of waste plastic combined with
a real momentum in the use of hydrogen from renewable sources may pave the way
for a rapid deployment of and investment in HUI facilities.

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